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May 28, 2015

Amazon expanding its same-day shipping offer

Prime shipping service has been a big win for mega online service

Amazon.com said on Thursday it will expand same-day delivery to San Diego and the Tampa Bay Area under its Prime shipping service, which has been an engine of revenue growth for the online seller.

Amazon offers same-day delivery to Prime members for $5.99 per order and non-members for $8.99 plus 99 cents per unit. It will now allow Prime members free same-day shipping on orders over $35, Greg Greeley, head of Prime, told Reuters.

"We know same-day delivery volumes will grow dramatically now that we are making it free," he said.

Amazon launched Prime a decade ago offering free, two-day shipping - at first charging $79, then raising the service to $99 last year. In 2009 Prime launched same-day delivery and last year started a one-hour delivery service, Prime Now.

Prime has become the cornerstone of Amazon's growth - and a testing ground for new services ranging from television programs and movies to delivery-by-drone.

Earlier this year Amazon said U.S. Prime membership increased 50 percent in 2014. In December, it said customers ordered more than 10 times as many items via same-day delivery this holiday season, compared to a year earlier.

The same-day delivery service is already available in cities such as New York, Philadelphia, the San Francisco Bay area, Seattle, Atlanta, Boston, and Baltimore, among others.